Uday Kotak flags strategic query as Japan’s MUFG makes ₹39,620 cr guess on Shriram Finance

Uday Kotak, Founder and Director of Kotak Mahindra Financial institution, has spotlighted the strategic significance of Japan’s Mitsubishi UFJ Monetary Group (MUFG) choosing up a minority stake in Shriram Finance, calling it a powerful sign of international confidence in India’s monetary sector.

Commenting on the deal in a put up on X (previously Twitter), Kotak mentioned he was “comfortable to see massive ticket international funding in Shriram Finance by Mitsubishi UFJ, a reputed world financial institution and monetary establishment,” whereas additionally posing a key query on the corporate’s future path — whether or not Shriram ought to proceed as a high-growth non-banking monetary firm (NBFC) or ultimately apply for a banking licence.

Blissful to see massive ticket international funding in Shriram Finance by Mitsubishi UFJ, a reputed world financial institution and monetary establishment. Will Shriram proceed as NBFC which has large potential with out regulatory constraints of a banking firm, or apply to grow to be a financial institution in the end?

— Uday Kotak (@udaykotak) December 19, 2025

Kotak’s remarks got here after MUFG introduced the acquisition of a 20% stake in Shriram Finance Ltd. for ₹39,620 crore, marking one of many largest international investments in India’s non-banking finance house this yr. The Japanese monetary main will purchase shares at ₹840.93 apiece, representing a reduction of round 3% to the inventory’s closing value on December 18.

Topic to approvals from related regulatory authorities, the transaction will end in Shriram Finance turning into an equity-method affiliate of each MUFG and MUFG Financial institution. As a part of the deal, MUFG can have the suitable to nominate two nominee administrators to the board of Shriram Finance, giving it a major strategic presence within the firm.

Along with the fairness funding, MUFG Financial institution has signed a memorandum of understanding with Shriram Finance to set up a strategic partnership geared toward accelerating the lender’s development via nearer collaboration. The settlement additionally contains non-compete and non-solicitation obligations on the Shriram Possession Belief in relation to the corporate’s lending and credit score companies. MUFG can pay a one-time, non-recurring price of $200 million to the Belief as a part of this association.

The Shriram Finance deal is the most recent in a collection of huge Japanese investments in India’s monetary providers sector. Earlier, MUFG’s home rival Sumitomo Mitsui Monetary Group (SMFG) acquired almost a 25% stake in Sure Financial institution for near $2 billion, underlining Japan Inc.’s rising curiosity in Indian monetary property.

With MUFG’s funding, India’s monetary sector has seen offers price over $11 billion in 2025 to this point, spanning each banks and non-bank lenders. Establishments comparable to Sure Financial institution, RBL Financial institution, Sammaan Capital and Federal Financial institution have all attracted sizeable investments this yr, reflecting sturdy investor urge for food for India’s increasing credit score market.

Shares of Shriram Finance surged on December 19, scripting historical past because the inventory surged to an all-time excessive following a mega-investment announcement. On Friday, shares of Shriram Finance gained 4.53 per cent to the touch an all-time excessive of Rs 908.55 on the BSE, surpassing its earlier shut of Rs 869.20 apiece. Finally examine, the counter was buying and selling 4.34 per cent greater at Rs 906.95.